What does a cash flow statement provide information about?

The cash flow statement provides detailed information about income and expenses over a specific period, outlining how cash moves in and out of a business or individual’s finances. This statement is crucial for assessing liquidity and financial health, as it reflects the actual cash generated and used during a reporting period, rather than merely accounting profits or losses.

By categorizing cash flows into operating, investing, and financing activities, a cash flow statement offers insights into how well an entity generates cash from its operations and how it manages that cash in terms of investments and financing arrangements. Understanding these flows helps stakeholders assess the availability of cash for day-to-day operations, future growth opportunities, debt repayment capabilities, and overall financial stability.

The other options do not fully capture the primary purpose of a cash flow statement. While assets and liabilities, investment gains and losses, and debt levels are important financial metrics, they are typically covered in other financial statements such as the balance sheet or income statement, rather than being the primary focus of a cash flow statement.